Mineral rights
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Mineral rights refer to the ability to own the right to mine minerals under the earth's surface. The United States is one of the few countries where property owners can own the right to use and build on their land (surface rights) and the rights to the minerals located under their property (mineral rights). Any ownership structure where someone has the property right, air right and the mineral right to a piece of land is called fee simple ownership. Because ownership of three pieces of the same property are divided up in this way it can lead to problems where the owner of the mineral right isn’t the same as the owner of the property right. This difference in ownership can cause conflict between the two owners. This system can also benefit fee simple owners who do not want to use the mineral rights they have to a property so they can sell or lease these rights to an energy company.[1]
Background
Mineral property can contain several kinds of minerals, including hydrocarbons, oil, coal, hard rock minerals such as gold, silver and copper, and other minerals such as bentonite. The value of mineral rights depends on the type and location of the minerals. Since mineral production is uncertain, estimates of value may vary depending on how the minerals can be extracted and produced. Mineral value can be estimated by multiplying the amount of a recoverable mineral by its expected market price, taking into account the costs of production.[2]
Split
In most western states, mineral rights have been split or severed from surface rights. This means that the person who owns the land may not be the same person as the owner of the minerals. Additionally, some states further split up these mineral rights and assign the right to different types of minerals that can be extracted. For example, in Illinois, one person may own the mineral rights to coal, while another may own the rights to [[oil] and gas extraction.[3][4]
See also
Footnotes
- ↑ Geology.com, “Mineral Rights,” accessed January 29, 2014
- ↑ Montana State University, "Understanding Mineral Rights," accessed April 6, 2015
- ↑ Frack Wire, "Mineral rights & fracking," June 17, 2013
- ↑ Attorneys' Title Guaranty Fund Inc., "A Primer on Mineral Interests in Illinois Real Estate," accessed April 17, 2014
